Wednesday, January 1, 2014

2014 - The Year of Points Inflation

2014 will be the year of points inflation. The points game won't die, but all the fun will be sucked out of it. Award prices will be going up, up, and way up, while earning opportunities will be curtailed. United award prices are increasing Feb 1, 2014, 40% for United flights and 80% for partner flights in premium cabins (Lufthansa flights can be booked, but it won't be worth while). United is also borrowing a page from Delta and requiring a minimum spend requirement for status qualification, in addition to the miles requirement.

From 135,000 Miles in First to Over 200,000

Delta will be increasing prices on their award chart, though it will go little noticed because there is so little discount award space, I haven't redeemed a Delta award in ages. When US Airways and American become a single carrier, March 31, I expect the US Airways award chart to vanish, taking with it the 90,000 mile around the world in business class award. Southwest is changing the Wanna Get Away fare from 60 points per dollar to 70 points as well.

Delta Lost Its Luster

Hotels and other programs are increasing prices too. Hertz applied about a 10% inflation rate to their chart. It didn't sting too badly because they announced it well in advance and 10% isn't too bad every few years. Hyatt is adding a new award tier so the extreme values at 22,000 points will be ok values at 30,000 points. A free bottle of Coke is 25% more today than yesterday too. As usual, every year more hotels move up in reward tier category than move down too; a less noticed form of inflation.